India and China finalised the agreement to open the pass in June 19, as part of an effort to improve diplomatic relations between the two. The opening comes only a few days after China inaugurated the Qinghai-Tibet Railway, which links Tibet to the rest of China.

The opening of the pass was marked by a ceremony on the Indian side attended by officials from both sides, including Sikkim Chief Minister Pawan Kumar Chamling – the chief guest, the Chinese ambassador to India, and the Chairman of the Tibet Autonomous Region, C Phuntsok. A delegation of 100 traders from India, and 100 Tibetans crossed the border to the respective trading towns. Despite heavy rain and chilly winds, the ceremony was marked with the attendance of many officials, locals, and international and local media.

At present, trade will be restricted to a small number of permitted goods, such as rice, tea and spices from India and goat and sheep skins, yak tails and silk from China. But the opening is expected to stimulate the economy of the region, and also bolster Indo-Chinese trade, which amounted to $7 billion in 2004. India hopes that the trade volumes between the two nations will grow to Rs. 206 crore (44.6 million US$) by 2007, and Rs. 12,203 crore (2.6 billion US$) by 2015.